Incentives for digital payments of GST to be deferred by a year
09 July 2018
The Group of Ministers (GoM) on digital transactions has suggested deferring by a year incentives to be given for digital payments under the Goods and Service Tax (GST) because of revenue implications.
In May, the GST Council had considered giving a concession of two per cent in GST to consumers making payments through cheques or the digital mode, with the discount to be capped at Rs100 a transaction, to encourage digital transactions.
However, the GoM, headed by Sushil Modi, the deputy chief minister of Bihar, has decided it is better to wait for stabilization of GST revenue before introducing such incentives.
The next meeting of the GST Council, which will be chaired by the union finance minister and include finance ministers from the states, will be held on July 21 and will consider the recommendations of the GoM.
“Let returns and GST revenues stabilise, then we can think about incentivising digital transaction,” said Modi. “The GoM will recommend to the Council that it may think about the proposal of incentivising digital transaction again after a year.”
The GST Council will also discuss a format for annual returns and audit and is expected to approve it at its meeting on July 21. Once it is done, the GST Network – the IT backbone – will finalise the software to enable businesses to file returns.
The GoM is also recommending that the GST Council decide on the class of registered persons required to deposit taxes on reverse charge basis.
“We have recommended omitting the present Section 9(4) and introducing a new Section 9(4) which will permit the government, on the recommendations of the GST Council, to notify specific class of registered persons, goods which would be covered under RCM provision,” said Modi.